Home Depot sues City of Los Angeles

Court battles between big boxes and their neighbors are nothing new, but a lawsuit in Southern California has brought up an interesting question about new store proposals: should a city council member who actively campaigns against a project be barred from voting on its fate?

At the center of the battle is a vacant Kmart store in the Sunland-Tujunga Valley, on the northern edge of Los Angeles. Steven Spielberg chose this community of tract houses as the setting for “E.T. The Extraterrestrial” in 1982. Home Depot originally wanted to raze the building and build a new structure, but community activists opposed these plans. After a series of meetings with city officials, the Atlanta retailer submitted an application to remodel the Kmart into a Home Depot.

More meetings ensued, modifications were made, permits were issued and work began on the project in the summer of 2006.

A number of local citizens still opposed the project, however, citing traffic, air quality, noise and the effect on local businesses. They also claimed that Home Depot went beyond tenant modification and remodeling by making structural changes to the Kmart building. Calling themselves the Sunland-Tujunga Alliance, the group has waged a pitched battle against the proposed store. After a series of back and forth decisions involving the building department, the zoning administration and the planning commission, the Los Angeles City Council voted last August to revoke Home Depot’s permit, shutting down the almost-finished store until the company conducts a lengthy environmental impact study.

On Nov. 9, Home Depot filed a lawsuit against the City of Los Angeles in California Superior Court. The complaint claims that the city obstructed a “routine, over-the-counter permit” to remodel an existing store solely for political reasons. The lawsuit accuses L.A. city councilwoman Wendy Greuel and her staff of advising the opposition to the project and guiding their interactions with city departments. Her bias against the project should have excluded her from voting on the project later on, the lawsuit says.

Another big supporter of the “No Home Depot” campaign in Sunland-Tujunga was a local competitor called Do it Centers, according to the lawsuit. The nine-unit hardware chain, based in Chatsworth, Calif., helped fund the opposition group’s lawyers, lobbyists and consultants, the complaint says. “Seeking to avoid fair competition in its geographic area, is challenging or has challenged Home Depot and other hardware stores in other California cities, including Thousand Oaks and Westlake Village,” it states.

Calls seeking comment from Jess Ruf, president and CEO of Lumber City Corp., the parent company of Do it Centers, were not returned. But Ruf has made no secret of his involvement in anti-big-box campaigns. In 2002, Ruf and a group of Agoura Hills residents used the ballot box to block a Home Depot from opening in their hometown. The hardware dealer provided funding for the legal and filing fees. “We became the money, [while] the residents and environmentalists worked the streets,” Ruf told HCN at the time.

Messages left for councilwoman Greuel’s office also went unanswered. Shortly after the lawsuit was filed, Greuel told the Los Angeles Times that she was only trying to make sure that Home Depot was complying with the city’s planning and zoning laws.

“Is Home Depot and their lawyer suggesting that if a council member supports or opposes a project before it comes to the council, that there a bias in that?” she asked.

Home Depot is being represented by Latham & Watkins, one of the country’s most prominent land-use law firms. The lawsuit asks for $10 million in damages and a reinstatement of the necessary permits to complete and open the store.

The Los Angeles City Attorney’s office has not filed a response yet, said spokesman Nick Velasquez. “The city attorney believes the city’s actions in this matter were absolutely appropriate, and he will vigorously defend the city in this litigation,” he added.